Architecture and Construction Are Beginning to Dig Out from the Recession

Employment in construction and architecture is up from their lowest points, but there's a long way to go to reclaim the ground lost in the Great Recession.

The financial crisis of 2008 had an outsized impact on the design and construction industries. No sector of the economy was hit harder than were construction (both residential and nonresidential), architecture, and engineering. The bubble in the housing market started to pop in 2006, when the construction industry topped out employing 8.045 million people. See below:

Click and drag the plot area to zoom in.

The next year's construction cycle maxed out at 7.957 million jobs and then 2008 at 7.448 million jobs, before dropping precipitously in 2009 and 2010. Doing the math, you'll discover that from peak to peak of those years (2006 to 2010), the construction sector lost 2.226 million jobs.

Since the 2010 nadir, the industry has added (to its peak month of the year) 26,000 jobs in 2011; 75,000 jobs in 2012; and 166,000 jobs in 2013. While job growth does seem to be intensifying each of the past three years, it is still a slow growth in comparison to where the industry was less than a decade ago. At this rate, it would take several years to return to the 7-million-plus jobs in construction that we saw in the early 2000s.

The architectural and engineering services sector of the economy is a much smaller portion of the economy than is that for total construction jobs, but it is subject to a similar hiring cycle as construction. Higher in the summer, lower in the winter, see below:

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While the number of people employed in construction peaked in 2006, architecture and engineering continued to add jobs up to the financial crisis, peaking in July 2008 at 1.469 million people employed. Between July 2008 and August 2010, the sector lost 178,400 jobs, or 12 percent of its workforce.

In the subsequent three years, however, architectural and engineering services has gained back almost half of the jobs that it lost. In August 2013, the sector was employing 85,000 more people than it was in August 2010, which is 93,400 jobs short of its 2008 peak.

So while the architecture and engineering industries are most likely still years away from gaining back what it lost in the crash, it is recovering much better than is the construction industry as a whole.

Note: For the charts above, I used the not seasonally adjusted data from the U.S. Department of Labor Bureau of Labor Statistics' December 2013 report. The jobs numbers that you hear each month are the seasonally adjusted numbers, which take into account normal business cycles (such as those you can see in both of the above charts, where up in the summer and down in the winter is the normal hiring cycle). For a longer-term analysis of the market, however, the raw data, not seasonally adjusted, is more effective.